UK Affordability still very good

WengerIn

GreatApe wrote: »

And thus the tables look even more affordable

Most places are affordable if you assume that two people save half their income for a decade and then buy at a time with record low interest rates:rotfl:

Filo25

WengerIn wrote: »

Most places are affordable if you assume that two people save half their income for a decade and then buy at a time with record low interest rates:rotfl:

The deposit is undoubtedly the main obstacle for many at present, and only a fool would deny that low rates are hugely supportive of a leveraged asset like housing.

Realistically though we talk about these rates as if they are somehow a tiny blip and unusual phenomenon, its been 9 years since the financial crisis and this is still where we are with no real sign of rate normalisation in the UK in the forseeable future.

To an extent this rate environment is "the new normal", I'm not saying rates will never rise again, they clearly will but it is probably a while away, and it will be extremely slow when it begins, the housing market is such a major part of the UK economy (and the UK political environment) that nobody is going to be taking actions which precipitate a collapse there.

economic

interesting real life case relevant to this debate:

http://www.bbc.co.uk/news/uk-politics-39743452

if you read it properly, you can see the real reason why they probably cant afford to buy a house. They blew some of the savings on a wedding in vegas. if thats the kind of people this couple are, who knows what other stupid spending they do. no where in the article does it mentions how careless spenders they could be. so just a silly bbc article yet again to make people think houses are a bubble.

on a 40k combined income and living with parents, they could have easily saved up for a 25% deposit (50k, on a 200k house) in 3 years. they just dont need to be spending on stupid things like vegas. dont blame house prices, blame the people who cant afford it!!

interesting article yet silly at the same time. typical bbc nonsense.

ukcarper

GreatApe wrote: »

For 25th percentile I did a search on right move which showed for example 1000 homes listed and I ordered by price and had a look at the 250th property. For median you look at the 500th property and for the 75 percentile the 750th property.

For Birmingham it was £130k £170k £250k. The median price of £170k is very close to the Land Registry which shows the average sale at 4% below asking price on rightmove for the median.

I then checked for within the m25 and the 25th percentile was a similar 25% below the median so I applied 25% off land registry figures to the original table.


I think this is a much better model. With FTB buying the 25th percentile second time buyers buying the 50th percentile and those with gifts and inheritances able to buy the 75th percentile.

And thus the tables look even more affordable

The problem with rightmove now is that is full of properties by homewise which are only available for overs 60s and are these basically shared ownership.

As I said cheapest house in Dagenham £225k next £265k if you take out homewise.

ukcarper

GreatApe wrote: »

What do you mean to some extent?
Clearly private renting for many private renters is a transitional tenure. You can see this even in the migrant community where those here for 10-30 years own more and rent less than those here for 5-10 years whi own more and rent less than those here for 0-5 years

Even if you assumed just 3.5 years of renting for the average adult (which means those who go to university buy straight away after leaving education) out of a 70 year adult life that means 5% of the 14.7% private renters in 2011 were transitional they should not even count as private renters as they will soon be owners or in social

I mean to some extent, private renters will always have including people who go on to buy and the large number of immigrants will rent initially, but it's difficult to judge the overall effect.

Transaction levels for FTBs has fallen between 1980 and 2008 the number of FTBs fluctuated between 300,000 600,000 and average in excess of 400,000 then it fell to 200,000 and was still below 300,000 in 2013 so less people are buying for the first time.

GreatApe

ukcarper wrote: »

I mean to some extent, private renters will always have including people who go on to buy and the large number of immigrants will rent initially, but it's difficult to judge the overall effect.

The 2011 census shows no housing problem for UK born Brits.

Transaction levels for FTBs has fallen between 1980 and 2008 the number of FTBs fluctuated between 300,000 600,000 and average in excess of 400,000 then it fell to 200,000 and was still below 300,000 in 2013 so less people are buying for the first time.

I believe the figures are FTBs with mortgages. Those who inherit property outright probably aren't in those figures. Those who are gifted property probably aren't in the figures either.

Also what's important is the percentage of FTB out of the total transactions and that is running at about 1/3rd which is fine and healthy.

GreatApe

economic wrote: »

interesting real life case relevant to this debate:

http://www.bbc.co.uk/news/uk-politics-39743452

if you read it properly, you can see the real reason why they probably cant afford to buy a house. They blew some of the savings on a wedding in vegas. if thats the kind of people this couple are, who knows what other stupid spending they do. no where in the article does it mentions how careless spenders they could be. so just a silly bbc article yet again to make people think houses are a bubble.

on a 40k combined income and living with parents, they could have easily saved up for a 25% deposit (50k, on a 200k house) in 3 years. they just dont need to be spending on stupid things like vegas. dont blame house prices, blame the people who cant afford it!!

interesting article yet silly at the same time. typical bbc nonsense.

They are trying to buy a £200k property

On right move it shows 1500 properties in Liverpool that cost £200k or more out of a total of 6500 properties

So they are trying to buy in the 77th percentile.

Basically on a combined wage much less than the median full time couple they are trying to buy not only the average property but one in the top 23% properties.

Wages below median full time and aiming to buy well above median property plus going to Vegas and spending all their life savings on that.

economic

GreatApe wrote: »

They are trying to buy a £200k property

On right move it shows 1500 properties in Liverpool that cost £200k or more out of a total of 6500 properties

So they are trying to buy in the 77th percentile.

Basically on a combined wage much less than the median full time couple they are trying to buy not only the average property but one in the top 23% properties.

Wages below median full time and aiming to buy well above median property plus going to Vegas and spending all their life savings on that.

yeh. tbh i had a bit of sympathy (but not too much) for them but when i read the vegas bit, i just started laughing at the couple for being morons.

ukcarper

GreatApe wrote: »

The 2011 census shows no housing problem for UK born Brits.




I believe the figures are FTBs with mortgages. Those who inherit property outright probably aren't in those figures. Those who are gifted property probably aren't in the figures either.

Also what's important is the percentage of FTB out of the total transactions and that is running at about 1/3rd which is fine and healthy.

I don't think the ONS figures show that

Unless you can show me otherwise I will not accept that there are significant numbers of cash FTB and that number has increased. I also don't accept that the FTB percentage of total transaction is the important issue that assumes fewer people want to buy.

GreatApe

ukcarper wrote: »

I don't think the ONS figures show that

Unless you can show me otherwise I will not accept that there are significant numbers of cash FTB and that number has increased. I also don't accept that the FTB percentage of total transaction is the important issue that assumes fewer people want to buy.

Peak ownership was in 2004 at 70-71%

Fast forward to 2011 census and it shows UK born ownership at 68.8% so not much of a fall

If FTB conditions are so dire why has ownership only nudged down 1-2% points over a 7 year period?